IBM complaint might have just cost Amazon $600M CIA cloud deal

Government Accountability Office agrees with IBM, which protested Amazon winning the contract

Amazon Web Services may have just lost out on a $600 million contract to supply cloud computing services to the Central Intelligence Agency, after the federal government upheld a protest that IBM had made related to the awarding of the contract.

Amazon Web Services reportedly secured a four-year, $600 million contract to provide "commercially managed" cloud computing services to the CIA. IBM filed a protest with the federal Government Accountability Office, and the GAO today agreed with IBM and recommended that the CIA rebid the contract. Federal Computer Weekly first reported this news today.

[ BACKGROUND: Amazon wins $600M deal to build the CIA a cloud ]

According to a memo by the GAO's general counsel, IBM's protest has been upheld on two counts: that the CIA failed to evaluate prices comparatively, and that it made special exceptions for Amazon Web Services regarding the waiving of a certain parts of the request for proposals, which proceeded the contract awarding.

IBM made other protests as well, including that the CIA did not properly take into account service outages that AWS experienced last year, but the GAO did not uphold that argument.

"As a result, GAO recommended that the agency reopen negotiations with the offerors, including amending the solicitation if necessary, to ensure that proposals are prepared and evaluated on a common basis," according to a memo from Ralph White, managing general counsel for procurement law at the GAO. "GAO also recommended that, at the conclusion of the reevaluation, the agency make a new selection decision."

The news is a big win for Big Blue, at least for now. AWS winning the contract earlier this year turned many people's heads. But it's not uncommon for competitors to protest contract awards. It's not yet known whether the CIA will heed the GAO's recommendations to rebid the contract.

Network World senior writer Brandon Butler covers cloud computing and social collaboration. He can be reached at BButler@nww.com and found on Twitter at @BButlerNWW.

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